No Tax on LOSAP Act

Bill Number

H.R. 2279

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-03-21: Referred to the House Committee on Ways and Means.

Last Updated

2025-12-02T09:05:53Z

AI-Generated Summary

Purpose

This legislation aims to provide tax relief to volunteer firefighters and emergency medical services (EMS) providers by increasing the amount of certain payments they receive that can be excluded from taxable income. It also clarifies that payments from length of service award programs (LOSAPs)—which reward volunteers for years of service—are eligible for this exclusion. The goal is to encourage volunteer participation in public safety roles without tax penalties.

Key Provisions

• Short Title: The Act is named the "No Tax on Length of Service Award Programs Act" or "No Tax on LOSAP Act."
• Increase in Exclusion Amount: Amends Section 139B of the Internal Revenue Code (IRC) to raise the annual tax-free exclusion for qualified payments (such as reimbursements or stipends for volunteer firefighting or EMS services) from $50 to $1,000 per individual.
• Clarification on LOSAP Payments: Explicitly includes payments under length of service award programs as "qualified payments" eligible for the tax exclusion.
• Effective Date: Both changes apply to payments awarded after the date the Act is enacted into law.

Significant Changes to Existing Law

• Under current IRC Section 139B, only up to $50 per year of payments for volunteer firefighting or EMS services can be excluded from gross income (taxable income). This Act increases that limit twentyfold to $1,000, making a larger portion of volunteer compensation tax-free.
• The existing definition of "qualified payments" is expanded to explicitly cover LOSAPs, which were not clearly included before, reducing ambiguity and potential disputes over tax treatment.

Potential Impacts

• On Citizens: Volunteer firefighters and EMS providers will face lower tax burdens on their service-related payments, potentially increasing disposable income and encouraging more people to volunteer for these critical roles. This could improve community safety by bolstering volunteer forces.
• On Government Agencies: The Internal Revenue Service (IRS) will need to update tax forms, guidance, and enforcement procedures to reflect the higher exclusion and clarified definitions, though the administrative burden is likely minimal. There may be a small reduction in federal tax revenue due to the increased exclusions.
• On International Relations: No direct impacts, as this is a domestic tax policy focused on U.S. volunteers.

Main Stakeholders Affected

• Primary Beneficiaries: Individual volunteer firefighters and EMS providers, who receive the tax exclusions directly.
• Organizations: Fire departments, EMS agencies, and volunteer associations that administer LOSAPs or other incentive programs, as the changes make these programs more attractive and sustainable.
• Government Entities: The IRS (for tax administration) and Congress (for fiscal policy implications).
• Broader Public: Taxpayers, who may see indirect benefits through enhanced public safety services, offset by minor revenue losses to the federal government.

Notable Legal, Constitutional, or Political Implications

• Legal: This is a straightforward amendment to the tax code, promoting clarity in how volunteer incentives are taxed and aligning with existing provisions for public safety workers. It reduces the risk of legal challenges over ambiguous LOSAP treatment.
• Constitutional: No apparent issues, as it involves congressional authority over taxation under Article I of the U.S. Constitution and does not infringe on individual rights or state powers.
• Political: The bill supports bipartisan priorities in public safety and volunteerism, introduced by representatives from New York. It could set a precedent for expanding tax incentives for essential community services, potentially influencing future tax relief legislation without major controversy.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Tenney, Claudia [R-NY-24]

Cosponsors (6)

Rep. Lawler, Michael [R-NY-17], Rep. Gillen, Laura [D-NY-4], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Garbarino, Andrew R. [R-NY-2], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Langworthy, Nicholas A. [R-NY-23]

Recent Actions

• 2025-03-21: Referred to the House Committee on Ways and Means.
• 2025-03-21: Introduced in House
• 2025-03-21: Introduced in House

Bill Versions

• No Tax on Length of Service Award Programs Act — issued 2025-03-21 — PDF (2 pages)